Infotech and the Law: Homeland Security--Ten things you should know

By Richard Rector

Aug 22, 2002

The Homeland Security Act (H.R. 5005) passed by the House in July is a massive piece of legislation that not only will restructure the government, it will reshape dealings between government and the private sector on a variety of security-related issues.

The law will affect different companies in different ways, and there are sure to be changes when the Senate considers the legislation in September. Nevertheless, here are 10 things about the Homeland Security Act that every executive and corporate counsel should know.

1. The legislation will have little effect on completed or pending matters. It contemplates a "transfer" to the new department of the functions, personnel, records, balances of appropriations and other assets and obligations of specific federal entities, programs and functions. For the most part, such transfers would not affect completed administrative actions (for example, contracts) or the pending proceedings of a transferred agency.

2. The department will have five principal functions, organized under five undersecretaries responsible for information analysis and infrastructure protection, science and technology, border and transportation security, emergency preparedness and response, and management.

3. The private sector would be expected to share information with the department regarding infrastructure and other vulnerabilities. This would include identifying priorities for infrastructure protection and support, providing advice on actions and countermeasures, and receiving specific warning and threat information from the government.

4. The department would establish procedures to ensure the security and confidentiality of information shared with it and to protect the rights of individuals who are subjects of such information, including the appointment of a privacy officer.

5. The legislation provides against the public release of information that is voluntarily submitted to a covered federal agency for official use when it is accompanied by an express statement regarding an expectation of non-disclosure. Such information would, among other things, be exempt from disclosure under the Freedom of Information Act.

6. The legislation establishes a structured Federal Cybersecurity Program to improve the security of critical federal information systems, including those used or operated by contractors of civilian agencies.

7. The department's undersecretary for science and technology would have broad research and development authority. This authority would be used to support the homeland security mission, except that the Department of Health and Human Services would retain responsibility for human health-related research and development activities. Responsibilities would include setting national priorities for systems and technologies for homeland security; establishing a centralized federal repository for information on technology and systems; and awarding grants, cooperative agreements and contracts "through competitions that are as open as possible."

8. The legislation would overhaul the government's immigration functions by abolishing the Immigration and Naturalization Service. The INS' enforcement responsibilities would be transferred to a Bureau of Immigration Enforcement within the new department. Other functions would stay with the Justice Department in the new Bureau of Citizenship and Immigration Services.

9. The new department generally would follow existing, governmentwide procurement laws, although streamlined acquisition authority would be available if procurement laws impair the department's mission. Such authority would be relatively limited and would trigger review and reporting obligations.

10. The legislation establishes significant liability protections for suppliers of "qualified anti-terrorism technologies" if they are sued as the result of terrorism. The protections include a bar on punitive damages and pre-judgment interest, a restriction on non-economic damages, a refutable presumption that the so-called government contractor defense applies to the lawsuit, and a liability limitation on insurance coverage reasonably available to the contractor.

Richard Rector is a partner in the Government Contracts practice group of Piper Rudnick LLP in Washington. His e-mail address is richard.rector@piperrudnick.com.

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